Proposed EU law on small business accounts filing will cause Companies House population explosion
The European Parliament and Council of ministers are now considering whether to pass new EU law abolishing the need for businesses under 1 million euro turnover to file accounts at official registries. According to Internal market and Services Commissioner Charlie McCreevy, this would relieve microbusinesses of administrative burden in tough economic times.
If this became law in member states like the UK, I reckon this could lead to a stampede of private businesses (sole traders, partnerships etc) registering as incorporated companies at the CRO.Why? Well, private businesses have traditionally stayed private in the past because they didn’t want to reveal their financial positions to all and sundry at Companies House. The downside of remaining private is that business owners have unlimited liability for debts. Under the proposed new law, small businesses will be able to register as limited liability companies, and still not reveal their accounts if their turnover is under 1 million euros per annum. I’d say that would be a pretty attractive proposition! Whoever said small is beautiful may well have been right!